PSX Phillips 66

Risks

• Our operating results and future rate of growth are exposed to the effects of changing commodity prices and refining, marketing and petrochemical margins.
• We expect to continue to incur substantial capital expenditures and operating costs as a result of our compliance with existing and future environmental laws and regulations. Likewise, future environmental laws and regulations may impact or limit our current business plans and reduce demand for our products.
• The adoption of climate change legislation or regulation could result in increased operating costs and reduced demand for the refined petroleum products we produce.
• Climate change may adversely affect our and our joint ventures’ facilities and ongoing operations.
• Political and economic developments could affect our operations and materially reduce our profitability and cash flows.
• Large capital projects can take many years to complete, and market conditions could deteriorate significantly between the project approval date and the project startup date, negatively impacting expected project returns.
• Plans we may have to expand existing assets or construct new assets, particularly in our Midstream segment, are subject to risks associated with societal and political pressures and other forms of opposition to the future development, transportation and use of carbon-based fuels. Such risks could adversely impact our ability to realize certain growth strategies.
• Our operations are subject to business interruptions and casualty losses. Failure to manage risks associated with business interruptions could adversely impact our operations, financial condition, results of operations and cash flows.
• There are certain hazards and risks inherent in our operations that could adversely affect those operations and our financial results.
• We do not insure against all potential losses, and, therefore, our business, financial condition, results of operations and cash flows could be adversely affected by unexpected liabilities and increased costs.
• Our investments in joint ventures decrease our ability to manage risk.
• We are subject to interruptions of supply and increased costs as a result of our reliance on third-party transportation of crude oil, NGL and refined petroleum products.
• Increased regulation of hydraulic fracturing could result in reductions or delays in U.S. production of crude oil and natural gas, which could adversely impact our results of operations.
• DCP Midstream’s success depends on its ability to obtain new sources of natural gas and NGL. Any decrease in the volumes of natural gas DCP Midstream gathers could adversely affect its business and operating results.
• Competitors that produce their own supply of feedstocks, have more extensive retail outlets, or have greater financial resources may have a competitive advantage.
• We may incur losses as a result of our forward contracts and derivative transactions.
• One of our subsidiaries acts as the general partner of a publicly traded master limited partnership, Phillips 66 Partners, which may involve a greater exposure to legal liability than our historic business operations.
• Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.
• Uncertainty and illiquidity in credit and capital markets can impair our ability to obtain credit and financing on acceptable terms and can adversely affect the financial strength of our business partners.
• Deterioration in our credit profile could increase our costs of borrowing money and limit our access to the capital markets and commercial credit, and could trigger co-venturer rights under joint venture arrangements.
• The level of returns on pension and postretirement plan assets and the actuarial assumptions used for valuation purposes could affect our earnings and cash flows in future periods.
• We are subject to continuing contingent liabilities of ConocoPhillips following the Separation relating to taxes and other matters. If we become obligated, we may need to use cash to meet these obligations and our financial results could be negatively impacted. Further, ConocoPhillips has indemnified us for certain matters, but may not be able to satisfy its obligations to us in the future.